EXECUTION COPY
DISTRIBUTION AGREEMENT
by and between
CRANE CO.
AND
HUTTIG BUILDING PRODUCTS, INC.
December 6, 1999
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS...............................................................1
ARTICLE II THE DISTRIBUTION........................................................10
Section 2.1 The Distribution.....................................................10
Section 2.2 Cooperation Prior to the Distribution................................11
Section 2.3 Crane Board Action; Conditions to the Declaration....................11
Section 2.4 Waiver of Conditions.................................................12
Section 2.5 Disclosure...........................................................12
ARTICLE III TRANSACTIONS RELATING TO THE DISTRIBUTION..............................12
Section 3.1 Intercorporate Transfers.............................................12
Section 3.2 Crane Group Obligations Relating to the Building Products
Business............................................................14
Section 3.3 Company Group Obligations Relating to the Crane Group................14
Section 3.4 Intercompany Accounts and Arrangements...............................15
Section 3.5 Cash Management......................................................16
Section 3.6 The Company Board....................................................17
Section 3.7 Resignations; Transfer of Stock Held as Nominee......................17
Section 3.8 Rights Plan..........................................................17
Section 3.9 Insurance............................................................17
Section 3.10 Use of Names, Trademarks, etc.......................................20
Section 3.11 Consents............................................................21
ARTICLE IV MUTUAL RELEASE; INDEMNIFICATION.........................................22
Section 4.1 Mutual Release.......................................................22
Section 4.2 Indemnification by Crane.............................................23
Section 4.3 Indemnification by the Company.......................................24
Section 4.4 Limitations on Indemnification Obligations...........................24
Section 4.5 Procedures Relating to Indemnification...............................25
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Section 4.6 Remedies Cumulative..................................................27
Section 4.7 Survival of Indemnities..............................................27
Section 4.8 Exclusivity of Tax Allocation Agreement..............................28
ARTICLE V ACCESS TO INFORMATION....................................................28
Section 5.1 Access to Information................................................28
Section 5.2 Production of Witnesses..............................................29
Section 5.3 Retention of Records.................................................29
Section 5.4 Confidentiality......................................................30
ARTICLE VI MISCELLANEOUS...........................................................30
Section 6.1 Entire Agreement; Construction.......................................30
Section 6.2 Survival of Agreements...............................................31
Section 6.3 Expenses.............................................................31
Section 6.4 Governing Law........................................................31
Section 6.5 Notices..............................................................31
Section 6.6 Dispute Resolution...................................................32
Section 6.7 Amendments...........................................................34
Section 6.8 Assignment...........................................................34
Section 6.9 Captions; Currency...................................................34
Section 6.10 Severability........................................................35
Section 6.11 Parties in Interest.................................................35
Section 6.12 Schedules...........................................................35
Section 6.13 Termination.........................................................35
Section 6.14 Waivers; Remedies...................................................35
Section 6.15 Further Assurances..................................................36
Section 6.16 Counterparts........................................................36
Section 6.17 Performance.........................................................36
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ANNEXES
Annex A - Employee Matters Agreement
Annex B - Tax Allocation Agreement
SCHEDULES
Schedule 1.1(b) - Company Subsidiaries
Schedule 1.1(c) - Huttig Bank Accounts
Schedule 1.1(d) - Huttig Financial Instruments
Schedule 1.1(e) - Huttig Litigation
Schedule 3.4(a)(i) - Intercompany Accounts
Schedule 3.4(b)(ii) - Intercompany Agreements
Schedule 3.7 - Continuing Directors and Officers
Schedule 4.2 - Certain Form 10 Sections
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DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT (this "Agreement"), dated as of December 6, 1999, by
and between CRANE CO., a Delaware corporation ("Crane"), and HUTTIG BUILDING
PRODUCTS, INC., a Delaware corporation and, as of the date hereof, an indirect
wholly owned subsidiary of Crane (the "Company").
WHEREAS, the Crane Board (as defined herein) has determined that it is
appropriate and desirable to distribute all outstanding shares of Huttig Common
Stock (as defined herein) on a pro rata basis to the holders of Crane Common
Stock (as defined herein); and
WHEREAS, Crane and the Company have determined that it is appropriate and
desirable to set forth the principal corporate transactions required to effect
such distribution and certain other agreements that will govern certain matters
relating to such distribution;
NOW, THEREFORE, in consideration of the premises and of the respective
agreements and covenants contained in this Agreement, the parties hereby agree
as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
"Acquisition Notes" shall have the meaning ascribed thereto in Section
3.1(b).
"Actions" means, with respect to any Person, any actual, threatened or
future action, suit, arbitration, inquiry, proceeding or investigation by or
before any Governmental Entity or any claims or other legal matters that have
been or may be asserted by or against, or otherwise affect, such Person.
"Affiliate" means, with respect to any specified Person, any other Person
that directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such specified Person; provided,
however, that for purposes of this Agreement, following the Time of Distribution
no member of either Group shall be deemed to be an Affiliate of any member of
the other Group. For purposes of the immediately preceding sentence, the term
"control" (including, with correlating meanings, the terms "controlled by" and
"under common control with"), as used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through
ownership of voting securities, by contract or otherwise.
"Agreement" shall have the meaning ascribed thereto in the preamble.
"Ancillary Agreements" means, together, the Employee Matters Agreement and
the Tax Allocation Agreement.
"Assets" means any and all assets, properties and rights, whether tangible
or intangible, real, personal or mixed, fixed, contingent or otherwise, and
wherever located (other than ownership interests in Subsidiaries).
"Assigning Party" shall have the meaning ascribed thereto in Section 3.11.
"Building Products Business" means (i) the business engaged in at all times
prior to the Time of Distribution by the Company Group of distribution and
manufacturing of doors, windows, millwork and other building products and
activities related thereto, and (ii) Former Businesses managed or operated with
any of the foregoing or operationally or otherwise related to any of the
foregoing.
"Cash" means all cash, cash on hand, cash in transit, cash equivalents,
funds, certificates of deposit, similar instruments and other short-term
investments held by Crane and its Subsidiaries and Affiliates (including,
without limitation, members of the Company Group) at the Time of Distribution
(it being understood that cash equivalents do not include intercompany cash
management balances which will be eliminated as of the Time of Distribution
pursuant to Section 3.4(a)).
"Change in Control" means, with respect to any party, any of the following
events or circumstances: (a) the first purchase of shares pursuant to a tender
offer or exchange offer for all or part of that party's common stock or any
securities convertible into such common stock, (b) the receipt by that party of
a Schedule 13D or other advice indicating that a Person is the "beneficial
owner" (as that term is defined in Rule 13d-3 under the Securities Exchange Act
of 1934, as amended) of 20% or more of that party's common stock calculated as
provided in paragraph (d) of said Rule 13d-3, (c) the date of approval by
stockholders of that party of an agreement providing for any consolidation or
merger of that party in which that party will not be the continuing or surviving
corporation or pursuant to which shares of common stock of that party would be
converted into cash, securities or other property, other than a merger of that
party in which the holders of its common stock immediately prior to the merger
would have the same proportion of ownership of common stock of the surviving
corporation immediately after the merger, (d) the date of the approval by
stockholders of that party of any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all or substantially all
the assets of that party, (e) the adoption of any plan or proposal for the
liquidation (but not a partial liquidation) or dissolution of that party, or (f)
the date on which Continuing Directors cease for any reason to constitute at
least a majority of the board of directors of that party.
"Claim" shall have the meaning ascribed thereto in Section 6.6.
"Claimant" shall have the meaning ascribed thereto in Section 6.6.
"Claims Administration" means the processing of claims made under the
Policies, including, without limitation, the reporting of claims to the
insurance carrier, management and defense of claims, and providing for
appropriate releases upon settlement of claims.
"Claims Made Policies" shall have the meaning ascribed thereto in Section
3.9(a).
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"Code" means the Internal Revenue Code of 1986, as amended, or any
successor legislation.
"Commission" means the Securities and Exchange Commission.
"Company" shall have the meaning ascribed thereto in the preamble.
"Company Board" means the Board of Directors of the Company.
"Company Group" means the Company and the Company Subsidiaries.
"Company Subsidiary" means each Person listed on Schedule 1.1(b) which is a
direct or indirect Subsidiary of the Company as of the Time of Distribution.
"Consents" means consents, approvals, waivers, clearances, exemptions,
allowances, novations, authorizations, filings, registrations and notifications.
"Continuing Director" means, with respect to either party, any member of
such party's board of directors who either (i) is a member of such board as of
the Time of Distribution or (ii) is thereafter elected to such board, or
nominated for election by stockholders, by a vote of at least three-quarters of
the directors who are Continuing Directors at the time of such vote.
"Contracts" means agreements, leases, contracts, memoranda of
understanding, letters of intent, sales orders, purchase orders, open bids and
other commitments and all rights therein and Liabilities thereunder, including,
without limitation, in each case, all amendments, modifications and supplements
thereto and waivers and consents thereunder.
"Crane" shall have the meaning ascribed thereto in the preamble.
"Crane Assets" means, collectively, all Assets which immediately prior to
the Time of Distribution are owned by Crane or any of its Subsidiaries
(including, without limitation, members of the Company Group), other than the
Huttig Assets. Anything contained herein to the contrary notwithstanding, Crane
Retained Assets shall be included in Crane Assets.
"Crane Board" means the Board of Directors of Crane or a duly authorized
committee thereof.
"Crane Common Stock" means the Common Stock, par value $1.00 per share, of
Crane.
"Crane Financial Instruments" means all credit facilities, guaranties,
foreign currency forward exchange contracts, comfort letters, letters of credit
and similar instruments related to the Crane Group obligations under which any
member of the Company Group has any primary, secondary, contingent, joint,
several and other liability.
"Crane Group" means Crane and its Affiliates, whether now or hereafter
existing, other than members of the Company Group.
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"Crane Indemnitees" means Crane, each Affiliate of Crane, including the
Crane Subsidiaries, each of their respective Representatives and each of the
heirs, executors, successors and assigns of any of the foregoing.
"Crane International" means Crane International Holdings, Inc., a Delaware
corporation and a wholly-owned subsidiary of Crane.
"Crane Retained Accounts" means all bank accounts of Crane and its
Subsidiaries and Affiliates (including, without limitation, members of the
Company Group), other than Huttig Bank Accounts.
"Crane Retained Assets" means the following:
(i) all (A) Crane Retained Accounts and (B) Cash, including,
without limitation, all Cash contained in the Crane Retained Accounts;
(ii) all Policies and all rights therein and related thereto,
other than the benefits of Occurrence Basis Policies and Claims Made Policies to
the extent described in Section 3.9(a);
(iii) all rights in and use of the name, trademark, trade name
and service xxxx "Xxxxx" and all corporate symbols and logos related thereto and
all names, trademarks, trade names and service marks which include the word
"Crane" or any derivative thereof (other than as provided for in Section 3.10);
(iv) all assets with respect to defined benefit pension plans of
Crane and its Subsidiaries (including, without limitation, members of the
Company Group);
(v) all assets that are used by Crane and its Subsidiaries and
Affiliates in providing corporate, insurance and administrative services to
Subsidiaries, divisions or operating units of the Crane Group not included in
the Building Products Business (whether or not the same or similar services are
provided to the Building Products Business); and
(vi) all rights, choses in action, causes of action and claims
arising out of any asset described in clauses (i) through (v) above.
"Crane Subsidiary" means any Subsidiary of Crane other than the Company or
any Company Subsidiary.
"Declaration" means the declaration of the Distribution by the Crane Board.
"Debt Financing" means (i) a working capital facility of $30 million or
such other amount as the Company Board shall determine to be necessary or
desirable for the Company, (ii) an acquisitions facility of $20 million or such
other amount as the Company Board shall determine to be necessary or desirable
for the Company and (iii) a credit facility or other credit arrangement to lend
such additional amount as shall be consistent with a rating of not less than
NAIC-2 for the Company's indebtedness.
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"Demand for Arbitration" shall have the meaning ascribed thereto in Section
6.6.
"Dispute" shall have the meaning ascribed thereto in Section 6.6.
"Distribution" means the distribution, on the basis provided for in Section
2.1, to holders of Crane Common Stock of the shares of Huttig Common Stock owned
by Crane on the Distribution Date.
"Distribution Agent" means ChaseMellon Shareholder Services, L.L.C. in its
capacity as the agent selected by Crane to distribute Huttig Common Stock in
connection with the Distribution.
"Distribution Date" means the date determined by the Crane Board as the
date on which the Distribution will be effected.
"Employee Matters Agreement" means the Employee Matters Agreement between
Crane and the Company, substantially in the form attached hereto as Annex A,
with such changes as are permitted under the terms of the Exchange Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Agreement" means the Share Exchange Agreement dated as of October
19, 1999 among Crane, the Company and Rugby pursuant to which, following the
Distribution, Rugby will contribute to the Company all of the issued and
outstanding capital stock of Rugby USA in exchange for a number of new shares of
Huttig Common Stock.
"Form 10" means the registration statement on Form 10 filed by the Company
with the Commission to effect the registration of the Huttig Common Stock
pursuant to the Exchange Act, including, without limitation, all amendments
thereto filed by the Company with the Commission prior to the Time of
Distribution.
"Former Business" means any corporation, partnership, entity, division,
business unit, business, assets, plants, product line, operations or contract
(including, without limitation, any assets and liabilities comprising the same)
that has been sold, conveyed, assigned, transferred or otherwise disposed of or
divested (in whole or in part) by any member of the Pre-Distribution Group or
the operations, activities or production of which has been discontinued,
abandoned, completed or otherwise terminated (in whole or in part) by any member
of the Pre-Distribution Group.
"Governmental Entity" means any government or any court, arbitral tribunal,
administrative agency or commission or other governmental or regulatory
authority or agency, whether Federal, state, local, domestic, foreign or
international.
"Group" means the Crane Group or the Company Group, as the context
requires.
"Hearing" shall have the meaning ascribed thereto in Section 6.6.
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"Huttig Assets" means, collectively, all Assets (other than Crane Retained
Assets) which immediately prior to the Time of Distribution are owned by Crane
or any of its Subsidiaries (including, without limitation, members of the
Company Group) and which are used primarily in or relate primarily to the
Building Products Business, as the same shall exist as of such time, including,
without limitation, (except as otherwise provided pursuant to any Transaction
Agreement) all assets reflected in the Huttig Balance Sheet, as such assets may
have been added to or sold or otherwise changed since the date thereof.
"Huttig Balance Sheet" means the balance sheet of the Company as of
September 30, 1999 contained in the Form 10.
"Huttig Bank Accounts" means all bank accounts set forth on Schedule
1.1(c).
"Huttig Common Stock" means, collectively, the Common Stock, par value $.01
per share, of the Company and the related Rights.
"Huttig Financial Instruments" means all credit facilities, guaranties,
foreign currency forward exchange contracts, comfort letters, letters of credit
and similar instruments related to the Building Products Business under which
any member of the Crane Group has any primary, secondary, contingent, joint,
several or other Liability, including, without limitation, those set forth on
Schedule 1.1(d).
"Huttig Indemnitees" means the Company, each Affiliate of the Company,
including the Company Subsidiaries, each of their respective Representatives and
each of the heirs, executors, successors and assigns of any of the foregoing.
"Huttig Liabilities" means (i) all Liabilities of any member of the Company
Group under any Transaction Agreement to which it is or becomes a party, (ii)
all Liabilities for which any member of the Company Group is made responsible
pursuant to any Transaction Agreement and (iii) all Liabilities based upon,
arising out of, relating to or otherwise in connection with the Huttig Assets or
the Building Products Business, whether based upon, arising out of, relating to
or otherwise in connection with events, actions, occurrences, omissions,
circumstances or conditions occurring, existing or asserted before, at or after
the Time of Distribution, including, without limitation: (A) all Liabilities
reflected (or of the type reflected) on the Huttig Balance Sheet or described
(or of the type described) in the notes thereto (as such Liabilities may have
been reduced or added to or otherwise changed since the date thereof), (B) all
Liabilities in respect of checks outstanding as of the Time of Distribution
relating to the Building Products Business, (C) all Liabilities in respect of
workers' compensation, automobile, general liability, products liability,
intellectual property liability and other claims and matters (whether direct or
by indemnification of any Person or otherwise) relating to the Building Products
Business, (D) all Liabilities in respect of all Actions relating to the Building
Products Business, including, without limitation, those Actions set forth on
Schedule 1.1(e), (E) all Liabilities in respect of salary, bonuses, incentive
payments, severance payments and other compensation payments for current or
former employees of the Building Products Business and all Taxes and
withholdings related thereto, (F) except for those Liabilities expressly assumed
by the Crane Group pursuant to the Employee Matters Agreement, all Liabilities
in respect of employee welfare and fringe
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benefits relating to the Building Products Business (including, without
limitation, claims for medical and disability benefits), (G) all Liabilities for
environmental matters based upon, arising out of, relating to or otherwise in
connection with the Building Products Business, including, without limitation,
Liabilities in respect of any facility to the extent relating to the Building
Products Business presently or formerly owned or operated by any member of the
Pre-Distribution Group, (H) all Liabilities based upon, arising out of, relating
to or otherwise in connection with Contracts related to the Building Products
Business, including, without limitation, Liabilities to make payments or
otherwise in connection with the termination thereof as a result of the
transactions contemplated hereby or otherwise, and (I) all Liabilities relating
to the credit facilities and other debt instruments to which any member of the
Company Group is a party at the Time of Distribution, including, without
limitation, all indebtedness outstanding thereunder and interest and fees
payable with respect thereto.
"Indemnifiable Losses" means, subject to Section 4.4, any and all losses,
Liabilities, claims, damages, deficiencies, obligations, fines, payments, Taxes,
Liens, costs and expenses, matured or unmatured, absolute or contingent, accrued
or unaccrued, liquidated or unliquidated, known or unknown, whenever arising and
whether or not resulting from Third Party Claims (including, without limitation,
the costs and expenses of any and all Actions; all amounts paid in connection
with any demands, assessments, judgments, settlements and compromises relating
thereto; interest and penalties recovered by a third party with respect thereto;
out-of-pocket expenses and reasonable attorneys', accountants' and other
experts' fees and expenses reasonably incurred in investigating, preparing or
defending against any such Actions or in asserting, preserving or enforcing an
Indemnitee's rights hereunder; and any losses that may result from the granting
of injunctive relief as a result of any such Actions).
"Indemnifying Party" shall have the meaning ascribed thereto in Section
4.4.
"Indemnitee" means any of the Crane Indemnitees or the Huttig Indemnitees
who or which may seek indemnification under this Agreement.
"Indemnity Reduction Amounts" shall have the meaning ascribed thereto in
Section 4.4(a).
"Information" means all records, books, contracts, instruments, computer
data and other data and information (in each case, in whatever form or medium,
including, without limitation, electronic media).
"Information Statement" means the information statement sent to the holders
of Crane Common Stock in connection with the Distribution.
"Initial Submission" shall have the meaning ascribed thereto in Section
6.6.
"Insurance Proceeds" means monies (a) received by an insured from an
insurance carrier, (b) paid by an insurance carrier on behalf of an insured or
(c) received from any third party in the nature of insurance, contribution or
indemnification in respect of any Liability.
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"IRS" means the Internal Revenue Service.
"Liabilities" means any and all claims, debts, liabilities, commitments and
obligations of whatever nature, whether fixed, contingent or absolute, matured
or unmatured, liquidated or unliquidated, accrued or not accrued, known or
unknown, due or to become due, whenever or however arising (including, without
limitation, those arising out of any contract or tort, whether based on
negligence, strict liability or otherwise) and whether or not the same would be
required by generally accepted accounting principles to be reflected as a
liability in financial statements or disclosed in the notes thereto, including,
without limitation, all costs and expenses relating thereto and those claims,
debts, liabilities, commitments and obligations arising under any law, rule,
regulation, Action, order or consent decree of any Governmental Entity or any
award of any arbitrator of any kind, and those arising under any Contract.
"Licenses" means licenses, permits, authorizations, consents, certificates,
registrations, variances, franchises and other approvals from any Governmental
Entity, including, without limitation, those relating to environmental matters.
"Lien" means any lien, security interest, pledge, mortgage, charge,
restriction, claim, retention of title agreement or other encumbrance of
whatever nature.
"NYSE" means the New York Stock Exchange, Inc.
"Occurrence Basis Policies" shall have the meaning ascribed thereto in
Section 3.9(a).
"Ordinary Course Intercompany Arrangements" shall have the meaning ascribed
thereto in Section 3.4(b)(ii).
"Parent Note" shall have the meaning ascribed thereto in Section 3.1(b).
"Person" means any individual, partnership, joint venture, corporation,
limited liability entity, trust, unincorporated organization or other entity
(including, without limitation, a Governmental Entity).
"Policies" means all insurance policies and insurance contracts of any kind
of the Pre-Distribution Group which include the Company, the Company
Subsidiaries and/or the Building Products Business within the definition of the
named insured and which were or are in effect at any time at or prior to the
Time of Distribution, including, without limitation, primary, excess and
umbrella policies, commercial general liability policies, fiduciary liability,
product liability, automobile, aircraft, property and casualty, directors and
officers liability, workers' compensation and employee dishonesty insurance
policies, bonds and captive insurance company arrangements, together with all
rights, benefits and privileges thereunder.
"Pre-Distribution Group" means (i) each of Crane, the Crane Subsidiaries
existing immediately prior to the Time of Distribution (including, without
limitation, members of the Company Group) and the former Crane Subsidiaries,
(ii) each of the predecessors of each of the
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foregoing and (iii) each of the present and former Subsidiaries and other
Affiliates of each of the foregoing, and their predecessors.
"Privileged Information" means, with respect to either Group, Information
regarding a member of such Group, or any of its operations, employees, assets or
Liabilities (whether in documents or stored in any other form or known to its
employees or agents) that is or may be protected from disclosure pursuant to the
attorney-client privilege, the work product doctrine or other applicable
privileges, that a member of the other Group may come into possession of or
obtain access to pursuant to this Agreement or otherwise.
"Recipient Party" shall have the meaning ascribed thereto in Section 3.11.
"Record Date" means the close of business on the date determined by the
Crane Board as the record date for the Distribution.
"Reply Submission" shall have the meaning ascribed thereto in Section 6.6.
"Representative" means, with respect to any Person, any of such Person's
directors, officers, employees, agents, consultants, advisors, accountants,
attorneys and representatives.
"Respondent" shall have the meaning ascribed thereto in Section 6.6.
"Rights" means the Rights to be issued pursuant to the Rights Plan.
"Rights Plan" means the rights agreement entered into on or prior to the
Distribution Date between the Company and ChaseMellon Shareholder Services,
L.L.C., as rights agent, substantially in the form filed as an exhibit to the
Form 10.
"Rugby" means The Rugby Group PLC, a company registered in England and
Wales under company number 206971.
"Rugby USA" means Rugby USA, Inc., a Georgia corporation and a wholly owned
subsidiary of Rugby.
"Securities Act" means the Securities Act of 1933, as amended.
"Share Exchange" means the exchange by Rugby of all of the issued and
outstanding capital stock of Rugby USA for, among other things, a number of new
shares of Huttig Common Stock, as contemplated by the Exchange Agreement.
"Subsidiary" means, with respect to any Person, any corporation or other
organization, whether incorporated or unincorporated, of which such Person or
any Subsidiaries of such Person controls or owns, directly or indirectly, more
than 50% of the stock or other equity interest, or more than 50% of the voting
power entitled to vote on the election of members to the board of directors or
similar governing body; provided, however, that for purposes of this Agreement
neither the Company nor any Company Subsidiary shall be deemed to be a Crane
Subsidiary (as defined herein).
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"Tax" shall have the meaning ascribed thereto in the Tax Allocation
Agreement.
"Tax Allocation Agreement" means the Tax Allocation Agreement between Crane
and the Company, substantially in the form attached hereto as Annex B, with such
changes as are permitted under the terms of the Exchange Agreement.
"Tax Ruling" means a private letter ruling issued by the IRS in form and
substance satisfactory to Crane (in its sole discretion) indicating that the
Distribution will qualify as a tax-free spin-off to the stockholders of Crane
for federal income tax purposes under Section 355 of the Code.
"Third Party Claim" shall have the meaning ascribed thereto in Section
4.5(a).
"Time of Distribution" means 12:01 a.m., New York City time, on the
Distribution Date.
"Transaction Agreements" means, collectively, this Agreement and each
Ancillary Agreement.
ARTICLE II
THE DISTRIBUTION
Section 2.1 The Distribution.
(a) Subject to Section 2.3, on or prior to the Distribution Date,
Crane will deliver to the Distribution Agent, for the benefit of holders of
record of Crane Common Stock as of the Record Date, a certificate or
certificates, endorsed by Crane in blank, representing all of the then
outstanding shares of Huttig Common Stock (excluding treasury shares held by
Crane), and will instruct the Distribution Agent to distribute on the
Distribution Date or as soon thereafter as practicable one share of Huttig
Common Stock in respect of every 4.5 shares of Crane Common Stock held by
holders of record of Crane Common Stock as of the Record Date. The Distribution
will be effective as of the Time of Distribution. Crane and the Company will
each provide to the Distribution Agent all information and share certificates,
in each case, as may be required in order to complete the Distribution on the
basis of one share of Huttig Common Stock for every 4.5 shares of Crane Common
Stock issued and outstanding as of the Record Date (excluding treasury shares
held by Crane).
(b) No certificates or scrip representing fractional shares of
Huttig Common Stock will be distributed to holders of Crane Common Stock in the
Distribution. The Distribution Agent will, as soon as practicable after the
Distribution Date, (i) determine the number of whole shares and fractional
shares of Huttig Common Stock allocable to each holder of record of Crane Common
Stock as of the Record Date, (ii) aggregate all fractional shares held by such
holders, and (iii) sell the whole shares attributable to the aggregate of such
fractional shares, in open market transactions, in each case at the then
prevailing trading price, and cause to be distributed to each such holder, in
lieu of any fractional share, without interest, such holder's
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ratable share of the proceeds of such sale, after making appropriate deductions
of the amount required, if any, to be withheld for U.S. federal income tax
purposes.
Section 2.2 Cooperation Prior to the Distribution. Prior to the
Distribution:
(a) Crane and the Company will prepare, and Crane will mail to
the holders of Crane Common Stock, the Information Statement, which will set
forth appropriate disclosures concerning the Company, the Distribution, Rugby
USA, the Share Exchange and such other matters as Crane and the Company may
determine. Crane and the Company will prepare, and the Company will file with
the Commission, the Form 10, which will include or incorporate by reference the
Information Statement. The Company will use its reasonable best efforts to cause
the Form 10 to become effective under the Exchange Act as soon as practicable
following the filing thereof.
(b) Crane and the Company will cooperate in preparing, filing
with the Commission and causing to become effective any registration statements
or amendments thereof which are required to reflect the establishment of, or
amendments to, any employee benefit and other plans contemplated by the Employee
Matters Agreement.
(c) Crane and the Company will take all such action as may be
necessary or appropriate under the securities or "blue sky" laws of the states
or other political subdivisions of the United States and the securities laws of
any applicable foreign countries or other political subdivisions thereof in
connection with the transactions contemplated by this Agreement.
(d) Crane and the Company will cause to be prepared, and the
Company will file and use its reasonable best efforts to have approved, an
application for listing on the NYSE the Huttig Common Stock to be distributed in
the Distribution.
Section 2.3 Crane Board Action; Conditions to the Declaration. The Crane
Board will, in its discretion and, if applicable, consistent with the Exchange
Agreement, establish the Record Date and make the Declaration and establish all
appropriate procedures in connection with the Distribution, but in no event will
the Declaration occur prior to such time as each of the following conditions
shall have been satisfied or shall have been waived by the Crane Board in
accordance with Section 2.4:
(a) Crane shall have received the Tax Ruling and the Tax Ruling
shall be in full force and effect;
(b) All applicable waiting periods under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, shall have been terminated or
expired;
(c) Crane shall have received copies of commitments for the Debt
Financing in form and substance satisfactory to Crane;
(d) all material Consents of Governmental Entities that are
required to effect the Distribution, if applicable, and the Share Exchange shall
have been obtained, where the
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failure to obtain such Consents, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect on the Company
(within the meaning of the Exchange Agreement) or a Material Adverse Effect on
Rugby USA (within the meaning of the Exchange Agreement);
(e) the Form 10 shall have become effective under the Exchange
Act and no stop order suspending the effectiveness of the Form 10 shall have
been issued, and no proceedings for that purpose shall have been initiated or
threatened by the Commission;
(f) the Huttig Common Stock shall have been approved for listing
on the NYSE, subject to official notice of issuance;
(g) the Requisite Rugby Vote (within the meaning of the Exchange
Agreement) shall have been obtained; and
(h) no order shall have been entered and shall have remained in
effect in any action or proceeding before any Governmental Entity that would
prohibit or make illegal the Distribution or the Exchange;
provided that the satisfaction of such conditions will not create any obligation
on the part of Crane pursuant to this Agreement to effect or seek to effect the
Distribution or in any way limit Crane's right to terminate this Agreement as
set forth in Section 6.13 or alter the consequences of any such termination from
those specified in such Section.
Section 2.4 Waiver of Conditions. Any or all of the conditions set forth
in Section 2.3 may be waived, in whole or in part, in the sole discretion of the
Crane Board.
Section 2.5 Disclosure. If at any time after the date hereof either of
the parties shall become aware of any circumstances that will or may prevent any
or all of the conditions contained in Section 2.3 from being satisfied, it will
promptly give to the other party written notice of those circumstances.
ARTICLE III
TRANSACTIONS RELATING TO THE DISTRIBUTION
Section 3.1 Intercorporate Transfers.
(a) Prior to the Distribution Date, Crane and the Company will
take all actions necessary to cause all of the outstanding shares of Huttig
Common Stock to be distributed by Crane International to Crane and to increase
the outstanding shares of Huttig Common Stock so that, immediately prior to the
Distribution, Crane will hold a number of shares of Huttig Common Stock (rounded
up to the nearest whole share) equal to the number of shares of Crane Common
Stock issued and outstanding as of the Record Date (excluding treasury shares
held by Crane) divided by 4.5.
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(b) Prior to the Time of Distribution, the Company will (i)
arrange the Debt Financing, (ii) pay to Crane (from time to time and on the day
prior to the Distribution Date) in reduction of intercompany indebtedness the
Company's net cash balances on hand, (iii) on the day prior to the Distribution
Date, issue to Crane a Note (the "Parent Note") in a principal amount equal to
the Parent Cash Amount (as defined in the Exchange Agreement) in exchange for a
like principal amount of existing indebtedness and (iv) from time to time upon
advances by Crane to fund acquisitions, issue notes in the principal amount
(not to exceed an aggregate of $15 million) of such advances (the "Acquisition
Notes"). On the day prior to the Distribution Date, subsequent to effecting
(iv) above, Crane will contribute or cause to be contributed to the capital of
the Company or otherwise settle or eliminate as provided in Section 3.4(a) all
indebtedness of the Company to Crane, other than the Parent Note and the
Acquisition Notes.
(c) The parties acknowledge that the Company Group currently is
conducting the Building Products Business and that all or substantially all of
the Huttig Assets and Huttig Liabilities are owned or are obligations of
members of the Company Group. Pursuant to the Distribution, the Huttig Assets
and Huttig Liabilities are intended to be allocated entirely to the Company
Group and the Crane Assets and Liabilities of Crane, and any Crane subsidiary
are intended to be allocated entirely to the Crane Group. Accordingly, in the
event that at any time or from time to time (whether prior to or after the Time
of Distribution) either party (or any member of such party's respective Group)
shall receive or otherwise possess any Asset that is allocated to any other
Person pursuant to this Agreement or any Ancillary Agreement, such party will
promptly transfer, or cause to be transferred, such Asset to the Person so
entitled thereto. Prior to any such transfer, the Person receiving or
possessing such Asset will hold such Asset in trust for the benefit of the
Person entitled thereto (at the expense of the Person entitled thereto). If at
any time or from time to time (whether prior to or after the Time of
Distribution) either Crane or the Company determines that the other party (or
any member of such other party's respective Group) shall not have
unconditionally assumed any Liabilities that are allocated to such other party
(or a member of such other party's respective Group) pursuant to this Agreement
or any Ancillary Agreement, such other party will promptly execute and deliver,
or cause to be executed and delivered, all such documents and instruments and
will take, or cause to be taken, all such actions as the requesting party may
reasonably request to unconditionally assume, or cause to be unconditionally
assumed, such Liabilities.
(d) Each of Crane (on behalf of itself and each member of the
Crane Group) and the Company (on behalf of itself and each member of the
Company Group) understands and agrees that, except as expressly set forth in
the Exchange Agreement or any Transaction Agreement, no party to any
Transaction Agreement or any other agreement or document contemplated by any
Transaction Agreement either has represented or warranted, or is representing
or warranting in any way, in such agreement or otherwise, (i) as to the Assets,
Subsidiaries, businesses or Liabilities owned at the date hereof by such party
or retained, transferred or assumed as contemplated hereby or thereby, (ii) as
to any consents or approvals required in connection with the transactions
contemplated by the Transaction Agreements, (iii) as to the value or freedom
from any Lien of, or any other matter concerning, any Assets or Subsidiaries of
either party, or (iv) as to the absence of any defenses or rights of setoff or
freedom from counterclaim with respect to any claim or other Assets or
Subsidiaries of either
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party. Except as may expressly be set forth in any Transaction Agreement, all
Assets and Subsidiaries owned at the date hereof or being transferred or
retained as contemplated by any Transaction Agreement or any other agreement or
document contemplated by any Transaction Agreement are held, or are being
transferred or retained, on an "as is", "where is" basis and the respective
owners or transferees shall bear the economic and legal risks that the title to
any Asset or Subsidiary shall be other than good and marketable and free and
clear of any Lien.
Section 3.2 Crane Group Obligations Relating to the Building
Products Business.
(a) The Company will, at its expense, take or cause to be taken
all commercially reasonable actions and enter into (or cause its Subsidiaries
to enter into) such agreements and arrangements as shall be necessary to effect
the release of and substitution for each member of the Crane Group, effective
as of the Time of Distribution, from all primary, secondary, contingent, joint,
several and other Liabilities in respect of Huttig Financial Instruments (it
being understood that all Liabilities in respect of Huttig Financial
Instruments are Huttig Liabilities). The Company will reimburse Crane for any
reimbursements made by Crane pursuant to any Huttig Financial Instruments and
that remain outstanding at the Distribution Date.
(b) The Company will, at its expense, use its reasonable best
efforts to take or cause to be taken all actions and to enter into (or cause
its Subsidiaries to enter into) such agreements and arrangements as shall be
necessary to effect the release of and substitution for each member of the
Crane Group, effective as of the Time of Distribution, from all primary,
secondary, contingent, joint, several and other Liabilities in respect of
bonds, indemnities, assurances and Contracts (other than the Exchange Agreement
and Huttig Financial Instruments, which are covered by paragraph (a) above)
under which any member of the Crane Group has any primary, secondary,
contingent, joint, several or other Liability arising out of or relating to the
Building Products Business which by their terms will be outstanding or in
effect as of or at any time following the Time of Distribution; provided,
however, that the Company shall not be obligated to pay any consideration
therefor to any third party (it being understood that all Liabilities in
respect of such bonds, indemnities, assurances and Contracts are Huttig
Liabilities).
(c) The Company's obligations under this Section 3.2 will
continue to be applicable to all Huttig Financial Instruments, bonds,
indemnities, assurances and Contracts identified at any time by Crane, whether
before, at or after the Time of Distribution.
Section 3.3 Company Group Obligations Relating to the Crane Group.
(a) Crane will, at its expense, take or cause to be taken all
commercially reasonable actions and enter into (or cause its Subsidiaries to
enter into) such agreements and arrangements as shall be necessary to effect
the release of and substitution for each member of the Company Group, effective
as of the Time of Distribution, from all primary, secondary, contingent, joint,
several and other Liabilities in respect of Crane Financial Instruments (it
being understood that all Liabilities in respect of Crane Financial Instruments
are Liabilities of Crane or its Subsidiaries).
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(b) Crane will, at its expense, use its reasonable best efforts
to take or cause to be taken all actions and to enter into (or cause its
Subsidiaries to enter into) such agreements and arrangements as shall be
necessary to effect the release of and substitution for each member of the
Company Group, effective as of the Time of Distribution, from all primary,
secondary, contingent, joint, several and other Liabilities in respect of
bonds, indemnities, assurances and Contracts (other than the Exchange Agreement
and Crane Financial Instruments, which are covered by paragraph (a) above)
under which any member of the Company Group has any primary, secondary,
contingent, joint, several or other Liability arising out of or relating to
businesses of the Pre-Distribution Group other than the Building Products
Business which by their terms will be outstanding or in effect as of or at any
time following the Time of Distribution; provided, however, that Crane shall
not be obligated to pay any consideration therefor to any third party (it being
understood that all Liabilities in respect of such bonds, indemnities,
assurances and Contracts are Liabilities of Crane or its Subsidiaries).
(c) Crane's obligations under this Section 3.3 will continue to
be applicable to all Crane Financial Instruments, bonds, indemnities,
assurances and Contracts identified at any time by the Company, whether before,
at or after the Time of Distribution.
Section 3.4 Intercompany Accounts and Arrangements.
(a) Elimination of Intercompany Accounts.
(i) Except as set forth in Section 3.4(a)(ii) or on Schedule
3.4(a)(i) and except for the Parent Note and the Acquisition Notes, the
Company, on behalf of itself and each other member of the Company Group, on the
one hand, and Crane, on behalf of itself and each other member of the Crane
Group, on the other hand, hereby agree to settle and eliminate, by cancellation
or transfer to a member of the other Group (whether to cancel or transfer and
the manner thereof will be determined by Crane), effective immediately prior to
the Time of Distribution, all intercompany receivables, payables and other
balances (including, without limitation, intercompany loans and cash management
balances) between the Company and/or any Company Subsidiary, on the one hand,
and Crane and/or any Crane Subsidiary, on the other hand.
(ii) The provisions of Section 3.4(a)(i) will not apply to
any intercompany receivables, payables and other balances incurred in
connection with the payment by any party of any expenses which are required to
be paid by the other party pursuant to Section 6.3.
(b) Intercompany Agreements.
(i) Except as set forth in Section 3.4(b)(ii), in
furtherance of the releases and other provisions of Section 4.1, the Company,
on behalf of itself and each other member of the Company Group, on the one
hand, and Crane, on behalf of itself and each other member of the Crane Group,
on the other hand, hereby terminate any and all agreements, arrangements,
commitments or understandings in existence as of the Time of Distribution,
whether or not in writing, between or among the Company and/or any Company
Subsidiary, on
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the one hand, and Crane and/or any Crane Subsidiary, on the other hand,
effective as of the Time of Distribution. No such terminated agreement,
arrangement, commitment or understanding (including, without limitation, any
provision thereof which purports to survive termination) shall be of any
further force or effect after the Time of Distribution.
(ii) The provisions of Section 3.4(b)(i) will not apply to any
of the following agreements, arrangements, commitments or understandings (or to
any of the provisions thereof): (A) the Transaction Agreements (and each other
agreement, instrument or document expressly contemplated by any Transaction
Agreement to be entered into by any of the parties hereto or any of the members
of their respective Group); (B) any agreement, arrangement, commitment or
understanding relating to any matter described in Section 3.4(a)(ii); (C) any
agreements, arrangements, commitments or understandings listed or described on
Schedule 3.4(b)(ii); (D) any agreements, arrangements, commitments or
understandings to which any Person other than the parties hereto and their
respective Affiliates is a party; (E) any other agreements, arrangements,
commitments or understandings that any of the Transaction Agreements expressly
contemplates will survive the Time of Distribution; (F) the Exchange Agreement;
and (G) any agreements, arrangements, commitments or understandings between the
Company and/or any Company Subsidiary, on the one hand, and Crane and/or any
Crane Subsidiary, on the other hand, for the purchase or sale of goods or
services of a type which the provider thereof provides to unaffiliated third
parties in the ordinary course of business ("Ordinary Course Intercompany
Arrangements"); provided, however, that in the event any such Ordinary Course
Intercompany Arrangements do not, as of the Time of Distribution, contain
commercially reasonable arm's-length terms of a type to which unaffiliated
parties would reasonably agree or do not include terms which would normally
appear in such arrangements between unaffiliated parties, Crane and the Company
will cause such Ordinary Course Intercompany Arrangements to be amended so that
they will contain terms which are, as of the Time of Distribution, commercially
reasonable arm's-length terms of a type to which unaffiliated parties would
reasonably agree.
Section 3.5 Cash Management.
(a) Bank Accounts. All Huttig Bank Accounts will constitute
Huttig Assets and all Crane Retained Accounts will constitute Crane Assets.
(b) Crane Customer Payments. The Company will, and will cause
its Subsidiaries and Affiliates to, forward promptly to Crane (for the account
of Crane or its applicable Subsidiary) any customer payments in respect of
accounts receivable owed to any member of the Crane Group received by the
Company or any of its Subsidiaries or Affiliates after the Time of
Distribution, whether received in lock boxes, via wire transfer or otherwise.
Such amounts will be forwarded by wire transfer (to Crane's bank account at
Bank One, N.A., Chicago, Illinois, ABA # 000000000, Account No. 51-53786) in
the case of customer payments received within thirty days after the
Distribution Date and by check in the case of customer payments received
thereafter.
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(c) Company Customer Payments. Crane will, and will cause its
Subsidiaries and Affiliates to, forward promptly to the Company (for the
account of the Company or its applicable Subsidiary) any customer payments in
respect of accounts receivable owed to any member of the Company Group received
by Crane or any of its Subsidiaries or Affiliates after the Time of
Distribution, whether received in lock boxes, via wire transfer or otherwise.
Such amounts will be forwarded by wire transfer in the case of customer
payments received within thirty days after the Distribution Date and by check
in the case of customer payments received thereafter.
Section 3.6 The Company Board. The Company and Crane will take all
actions which may be required to elect or otherwise appoint as directors of the
Company, prior to the Time of Distribution, the persons named in the Form 10 to
constitute the Company Board at the Time of Distribution.
Section 3.7 Resignations; Transfer of Stock Held as Nominee.
(a) Crane will cause all of its employees and directors and all
of the employees and directors of each other member of the Crane Group to
resign, not later than the Time of Distribution, from all boards of directors
or similar governing bodies of the Company or any other member of the Company
Group on which they serve, and from all positions as officers of the Company or
any other member of the Company Group in which they serve, except as otherwise
specified on Schedule 3.7. The Company will cause all of its employees and
directors and all of the employees and directors of each other member of the
Company Group to resign, not later than the Time of Distribution, from all
boards of directors or similar governing bodies of Crane or any other member of
the Crane Group on which they serve, and from all positions as officers of
Crane or any other member of the Crane Group in which they serve, except as
otherwise specified on Schedule 3.7.
(b) Crane will cause each of its employees and each of the
employees of the other members of the Crane Group to revoke or withdraw their
express written authority, if any, to act on behalf of any Company Group entity
as an agent or representative therefor after the Time of Distribution. The
Company will cause each of its employees and each of the employees of the other
members of the Company Group to revoke or withdraw their express written
authority, if any, to act on behalf of any Crane Group entity as an agent or
representative therefor after the Time of Distribution.
Section 3.8 Rights Plan. Prior to the Time of Distribution, the Company
Board will adopt the Rights Plan and declare a dividend of the Rights so that
each share of Huttig Common Stock issued and outstanding as of the Time of
Distribution will initially have one Right attached thereto.
Section 3.9 Insurance.
(a) Coverage. Coverage of the Company and the Company
Subsidiaries under all Policies shall cease as of the Time of Distribution.
From and after
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the Time of Distribution, the Company and the Company Subsidiaries will be
responsible for obtaining and maintaining all insurance coverages in their own
right. All Policies will constitute Crane Retained Assets and will be retained
by Crane and the Crane Subsidiaries (with Crane and the Crane Subsidiaries
being the only named insureds thereunder), together with all rights, benefits
and privileges thereunder (including, without limitation, the right to receive
any and all return premiums with respect thereto). The Company and the Company
Subsidiaries will have no rights with respect to any Policies, except that (i)
the Company will have the right to assert claims (and Crane will use reasonable
best efforts to assist the Company in asserting claims) for any loss, liability
or damage with respect to Huttig Assets under Policies with third-party
insurers which are "occurrence basis" Policies ("Occurrence Basis Policies")
arising out of insured incidents occurring from the date coverage thereunder
first commenced until the Time of Distribution to the extent that the terms and
conditions of any such Occurrence Basis Policies and agreements relating
thereto so allow and (ii) the Company will have the right to continue to
prosecute claims properly asserted with the insurance carrier prior to the Time
of Distribution (and Crane will use reasonable best efforts to assist the
Company in connection therewith) under Policies with third-party insurers which
are Policies written on a "claims made" basis ("Claims Made Policies") arising
out of insured incidents occurring from the date coverage thereunder first
commenced until the Time of Distribution to the extent that the terms and
conditions of any such Claims Made Policies and agreements relating thereto so
allow, provided that, in the case of both clauses (i) and (ii) above, (A) all
of Crane's and each Crane Subsidiary's reasonable costs and expenses incurred
in connection with the foregoing are promptly paid by the Company, (B) Crane
and the Crane Subsidiaries may, at any time, without liability or obligation to
the Company or any Company Subsidiary (other than as set forth in Section
3.9(b)), amend, commute, terminate, buy-out, extinguish liability under or
otherwise modify any Occurrence Basis Policies or Claims Made Policies (and
such claims shall be subject to any such amendments, commutations,
terminations, buy-outs, extinguishments and modifications), (C) such claims
will be subject to (and recovery thereon will be reduced by the amount of) any
applicable deductibles, retentions, self-insurance provisions or any payment or
reimbursement obligations of Crane, any Crane Subsidiary or any Affiliate of
Crane or any Crane Subsidiary in respect thereof and (D) such claims will be
subject to exhaustion of aggregate limits. Crane's obligation to use reasonable
best efforts to assist the Company in asserting claims under Occurrence Basis
Policies will include using reasonable best efforts in assisting the Company to
establish its right to coverage under Occurrence Basis Policies (so long as all
of Crane's costs and expenses in connection therewith are promptly paid by the
Company). None of Crane or the Crane Subsidiaries will bear any Liability for
the failure of an insurance carrier to pay any claim under any Occurrence Basis
Policy or Claims Made Policy. It is understood that any Claims Made Policies
will not provide any coverage to the Company and the Company Subsidiaries for
any incident occurring prior to the Time of Distribution but as to which a
Claim is asserted with the insurance carrier after the Time of Distribution,
except and to the extent that coverage is provided under discovery coverage
purchased by the Company (at the Company's expense) with respect to Crane's
excess general liability Claims Made Policies.
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(b) Crane Actions. If Crane or any Crane Subsidiary proposes to
amend, commute, terminate, buy-out, extinguish liability under or otherwise
modify any Occurrence Basis Policies or Claims Made Policies under which the
Company has rights to assert claims pursuant to Section 3.9(a) in a manner that
would adversely affect any such rights of the Company, (i) Crane will give the
Company prior notice thereof and consult with the Company with respect to such
action (it being understood that the decision to take any such action will be
in the sole discretion of Crane) and (ii) Crane will pay to the Company its
equitable share (based on the amount of premiums paid by or allocated to the
Company in respect of the applicable Policy) of any net proceeds actually
received by Crane from the insurance carrier of the applicable Policy as a
result of such action by Crane (after deducting Crane's reasonable costs and
expenses incurred in connection with such action).
(c) Administration. From and after the Time of Distribution:
(i) Crane will be responsible for the Claims Administration
with respect to claims of Crane and the Crane Subsidiaries under Occurrence
Basis Policies and Claims Made Policies; and
(ii) The Company or a Company Subsidiary, as appropriate,
will be responsible for the Claims Administration with respect to the claims of
the Company and the Company Subsidiaries under Occurrence Basis Policies and
Claims Made Policies.
(d) Insurance Premiums.
(i) Crane will pay all premiums (retrospectively-rated or
otherwise) as required under the terms and conditions of the respective
Policies in respect of periods prior to the Time of Distribution, whereupon the
Company will upon receipt of evidence thereof, forthwith reimburse Crane for
that portion of such premiums paid by Crane as are attributable to the Company.
(ii) In addition, Huttig will reimburse Crane for claims
and related expenses (paid by insurance carriers which are reimbursed by Crane)
for claims against Huttig arising out of an occurrence prior to the time of
Distribution.
(e) Agreement for Waiver of Conflict and Shared Defense. In the
event that an Occurrence Basis Policy or Claims Made Policy provides coverage
for both Crane and/or a Crane Subsidiary, on the one hand, and the Company
and/or a Company Subsidiary, on the other hand, relating to the same
occurrence, Crane and the Company agree to defend jointly and to waive any
conflict of interest necessary to the conduct of that joint defense. Nothing in
this Section 3.9(e) will be construed to limit or otherwise alter in any way
the indemnity obligations of the parties to this Agreement, including, without
limitation, those created by this Agreement, by operation of law or otherwise.
(f) Directors' and Officers' Insurance. Crane will use its
reasonable best efforts to cause the persons currently serving as directors
and/or officers of Crane or any Subsidiary of Crane who will be or become,
effective as of the Time of Distribution, directors
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and/or officers of the Company or any Company Subsidiary to be covered for a
period of six years from the Time of Distribution with respect to claims
arising from facts or events that occurred prior to the Time of Distribution by
the directors' and officers' liability insurance policies maintained by Crane
during such six-year period following the Time of Distribution for all persons
who served as directors and/or officers of Crane or any Crane Subsidiary prior
to the Time of Distribution.
Section 3.10 Use of Names, Trademarks, etc.
(a) From and after the Time of Distribution, Crane will have all
rights in and use of the name "Crane" and all corporate symbols and logos
related thereto and all derivatives thereof and the Company will have all
rights in and use of the name "Huttig" and all corporate symbols and logos
related thereto and all derivatives thereof. Prior to or promptly after the
Time of Distribution (but in no event later than 90 days after the Distribution
Date in the case of United States Persons and 180 days after the Distribution
Date in the case of non-United States Persons), the Company will change the
name of any Subsidiary or other Person under its control to eliminate therefrom
the name "Crane" and all derivatives thereof and Crane will change the name of
any Subsidiary or other Person under its control to eliminate therefrom the
name "Huttig" and all derivatives thereof.
(b) From and after the Time of Distribution, the Company Group
will not use or have any rights to the name "Crane" or any derivatives thereof
or any other trademark, trade name, service xxxx or logo of the Crane Group
constituting Crane Assets, or any corporate symbol or logo related thereto or
to any thereof or any name or xxxx which includes the words "Crane" or any
derivative thereof or name or xxxx confusingly similar thereto, or any special
script, type font, form, style, logo, design, device, trade dress or symbol
used or possessed by the Crane Group before or after the Time of Distribution
which contains the trademark, trade name or service xxxx "Xxxxx" or any
derivative thereof or any name or xxxx confusingly similar thereto and the
Company Group will not hold itself out as having any affiliation with the Crane
Group.
(c) From and after the Time of Distribution, the Crane Group
will not use or have any rights to the name "Huttig" or any derivatives thereof
or any other trademark, trade name, service xxxx or logo of the Company Group
constituting Huttig Assets, or any corporate symbol or logo related thereto or
to any thereof or any name or xxxx which includes the words "Huttig" or any
derivative thereof or name or xxxx confusingly similar thereto, or any special
script, type font, form, style, logo, design, device, trade dress or symbol
used or possessed by the Company Group before or after the Time of Distribution
which contains the trademark, trade name or service xxxx "Huttig" or any
derivative thereof or any name or xxxx confusingly similar thereto and the
Crane Group will not hold itself out as having any affiliation with the Company
Group.
(d) The Company will not, and will cause each other member of
the Company Group not to, challenge or contest the validity of the trademarks,
trade names, corporate symbols
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or logos described in Section 3.10(b), the registration thereof or the
ownership thereof by the Crane Group. The Company will not, and will cause each
other member of the Company Group not to, apply anywhere at any time for any
registration as owner or exclusive licensee of such trademarks, trade names,
corporate symbols or logos. If, notwithstanding the foregoing, any title or
interest in or to the use of any such trademarks, trade names, corporate
symbols or logos in any jurisdiction, or any goodwill incident thereto, the
Company will, upon the request of Crane, and for a nominal consideration of one
dollar, assign or cause to be assigned to Crane or any designee of Crane, all
right, title and interest in and to the use of such trademarks, trade names,
corporate symbols or logos in any and all jurisdictions, together with any
goodwill incident thereto.
(e) Crane will not, and will cause each other member of the
Crane Group not to, challenge or contest the validity of the trademarks, trade
names, corporate symbols or logos described in Section 3.10(c), the
registration thereof or the ownership thereof by the Company Group. Crane will
not, and will cause each other member of the Crane Group not to, apply anywhere
at any time for any registration as owner or exclusive licensee of such
trademarks, trade names, corporate symbols or logos. If, notwithstanding the
foregoing, any member of the Crane Group develops, adopts or acquires, directly
or indirectly, any right, title or interest in or to the use of any such
trademarks, trade names, corporate symbols or logos in any jurisdiction, or any
goodwill incident thereto, Crane will, upon the request of the Company, and for
a nominal consideration of one dollar, assign or cause to be assigned to the
Company or any designee of the Company, all right, title and interest in and to
the use of such trademarks, trade names, corporate symbols or logos in any and
all jurisdictions, together with any goodwill incident thereto.
(f) The Company will cause each member of the Company Group to
comply with the provisions of this Section 3.10 and Crane will cause such
member of the Crane Group to comply with the provisions of this Section 3.10.
Nothing in this Section 3.10 will prevent any member of the Crane Group from
enforcing the provisions of this Section 3.10 against any member of the Company
Group or any member of the Company Group from enforcing the provisions of this
Section 3.10 against any member of the Crane Group.
Section 3.11 Consents. Prior to and after the Distribution Date, Crane
and the Company will, and will cause their respective Subsidiaries to, use
their reasonable best efforts (as requested by the other party) to obtain, or
to cause to be obtained, all Consents and to resolve any impracticalities of
assignments or transfers necessary for the transfer of all Assets, Subsidiaries
and Liabilities contemplated to be transferred pursuant to this Article III;
provided, however, that none of Crane or the Company or their respective
Subsidiaries shall be obligated to pay any consideration or offer or grant any
financial accommodation in connection therewith. Anything contained herein to
the contrary notwithstanding, this Agreement shall not constitute an agreement
to assign any Contract, License or Asset if an assignment or attempted
assignment of the same without the Consent of any other party or parties
thereto or other required Consent would constitute a breach thereof or of any
applicable law or in any way impair the rights of any member of the Crane Group
or the Company Group thereunder. If any such Consent is not obtained or if an
attempted assignment would be ineffective or would impair any member of either
Group's rights under any such Contract, License or Asset so that the
contemplated
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assignee hereunder (the "Recipient Party") would not receive all such rights,
then (x) the party contemplated hereunder to assign such Contract, License or
Asset (the "Assigning Party") will use reasonable best efforts (it being
understood that such efforts shall not include any requirement of the Assigning
Party to pay any consideration or offer or grant any financial accommodation)
to provide or cause to be provided to the Recipient Party, to the extent
permitted by law, the benefits of any such Contract, License or Asset and the
Assigning Party will promptly pay or cause to be paid to the Recipient Party
when received all moneys and properties received by the Assigning Party with
respect to any such Contract, License or Asset and (y) the Recipient Party will
pay, perform and discharge on behalf of the Assigning Party all of the
Assigning Party's Liabilities thereunder in a timely manner and in accordance
with the terms thereof. In addition, the Assigning Party will take such other
actions (at the Recipient Party's expense) as may reasonably be requested by
the Recipient Party in order to place the Recipient Party, insofar as
reasonably possible, in the same position as if such Contract, License or Asset
had been transferred as contemplated hereby and so all the benefits and burdens
relating thereto, including, without limitation, possession, use, risk of loss,
potential for gain and dominion, control and command, shall inure to the
Recipient Party. If and when such Consents are obtained, the transfer of the
applicable Contract, License or Asset shall be effected as promptly following
the Time of Distribution as shall be practicable in accordance with the terms
of this Agreement. To the extent that any transfers and assumptions
contemplated by this Article III shall not have been consummated on or prior to
the Time of Distribution, the parties shall cooperate to effect such transfers
as promptly following the Time of Distribution as shall be practicable, it
nonetheless being agreed and understood by the parties that neither party shall
be liable in any manner to the other party for any failure of any of the
transfers contemplated by this Article III to be consummated prior to the Time
of Distribution.
ARTICLE IV
MUTUAL RELEASE; INDEMNIFICATION
Section 4.1 Mutual Release. Effective as of the Time of Distribution
and except as otherwise specifically set forth in the Transaction Agreements,
each of Crane, on the one hand, and the Company, on the other hand, on its own
behalf and on behalf of each of its respective Subsidiaries, hereby releases
and forever discharges the other and its Subsidiaries, and its and their
respective officers, directors, agents, Affiliates, record and beneficial
security holders (including, without limitation, trustees and beneficiaries of
trusts holding such securities), advisors and Representatives (in their
respective capacities as such) and their respective heirs, executors,
administrators, successors and assigns, of and from all debts, demands,
actions, causes of action, suits, accounts, covenants, contracts, agreements,
damages, claims and Liabilities whatsoever of every name and nature, both in
law and in equity, that the releasing party has or ever had, that arise out of
or relate to events, circumstances or actions taken by such other party or any
conditions existing at or prior to the Time of Distribution; provided, however,
that the foregoing general release shall not apply to (i) any Liabilities
(including, without limitation,
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Liabilities with respect to indemnification or contribution) under the
Transaction Agreements or assumed, transferred, assigned, allocated or arising
under any of the Transaction Agreements (including, without limitation, any
Liability that the parties may have with respect to indemnification or
contribution pursuant to any Transaction Agreement for claims brought against
the parties by third Persons) and will not affect any party's right to enforce
the Transaction Agreements in accordance with their terms, (ii) any Liability
arising from or relating to any agreement, arrangement, commitment or
undertaking described in Section 3.4(b)(ii) (including, without limitation,
Ordinary Course Intercompany Arrangements) or (iii) any Liability the release
of which would result in the release of any Person other than a Person released
pursuant to this Section 4.1 (provided that the parties agree not to bring suit
or permit any of their Subsidiaries to bring suit against any Person with
respect to any Liability to the extent such Person would be released with
respect to such Liabilities by this Section 4.1 but for this clause (iii)).
Section 4.2 Indemnification by Crane. Except as otherwise specifically
provided in any Transaction Agreement and subject to the provisions of this
Article IV, Crane shall indemnify, defend and hold harmless the Huttig
Indemnitees from and against, and pay or reimburse, as the case may be, the
Huttig Indemnitees for, all Indemnifiable Losses, as incurred or suffered by
any Huttig Indemnitee based upon, arising out of, relating to or otherwise in
connection with:
(a) businesses of Crane, the Crane Subsidiaries and their
respective predecessors (other than the Building Products Business) engaged in
at or prior to the Time of Distribution, the Crane Assets or Liabilities of
Crane or any Crane Subsidiary as of the Time of Distribution which are not
Huttig Liabilities (including, without limitation, the failure by Crane or any
other member of the Crane Group to pay, perform or otherwise discharge such
Liabilities in accordance with their terms), whether such Indemnifiable Losses
are based upon, arise out of or relate to or are otherwise in connection with
events, occurrences, actions, omissions, facts, circumstances or conditions
occurring, existing or asserted before, at or after the Time of Distribution;
(b) any untrue statement or alleged untrue statement of a
material fact contained in the sections of the Form 10 listed on Schedule 4.2,
or any omission or alleged omission to state in such sections a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; but only
in each case with respect to information relating to the Crane Group provided
by Crane expressly for use in the sections of the Form 10 listed on Schedule
4.2;
(c) the breach by any member of the Crane Group of any agreement
or covenant contained in a Transaction Agreement which does not by its express
terms expire at the Time of Distribution; or
(d) the enforcement by the Huttig Indemnitees of their rights to
be indemnified, defended and held harmless under this Agreement.
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Section 4.3 Indemnification by the Company. Except as otherwise
specifically provided in any Transaction Agreement and subject to the provisions
of this Article IV, the Company and the Company Subsidiaries shall indemnify,
defend and hold harmless the Crane Indemnitees from and against, and pay or
reimburse, as the case may be, the Crane Indemnitees for, all Indemnifiable
Losses, as incurred, suffered by any Crane Indemnitee based upon, arising out
of, relating to or otherwise in connection with:
(a) the Building Products Business, the Huttig Assets or the
Huttig Liabilities (including, without limitation, (i) any guarantees or
obligations to assure performance or perform given or made by, or other
Liabilities of, Crane or any Crane Subsidiary with respect to the Building
Products Business, and (ii) the failure by the Company or any other member of
the Company Group to pay, perform or otherwise discharge Huttig Liabilities in
accordance with their terms) whether such Indemnifiable Losses are based upon,
arise out of or relate to or are otherwise in connection with events,
occurrences, actions, omissions, facts, circumstances or conditions occurring,
existing or asserted before, at or after the Time of Distribution;
(b) any untrue statement or alleged untrue statement of a
material fact contained in the Form 10, or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading, except in each case with respect to information
relating to the Crane Group provided by Crane expressly for use in the sections
of the Form 10 listed on Schedule 4.2;
(c) the breach by any member of the Company Group of any
agreement or covenant contained in a Transaction Agreement which does not by
its express terms expire at the Time of Distribution;
(d) any Action or other claim alleging that any Liability was
improperly allocated to the Company Group or that any Asset was improperly
withheld from the Company Group, in each case pursuant to any of the
Transaction Agreements; or
(e) the enforcement by the Crane Indemnitees of their rights to
be indemnified, defended and held harmless under this Agreement.
Section 4.4 Limitations on Indemnification Obligations.
(a) The amount that any party (an "Indemnifying Party") is or
may be required to pay to an Indemnitee in respect of Indemnifiable Losses or
other Liability for which indemnification is provided under this Agreement
shall be reduced by any amounts actually received (including, without
limitation, Insurance Proceeds actually received) by or on behalf of such
Indemnitee (net of increased insurance premiums and charges related directly
and solely to the related Indemnifiable Losses and costs and expenses
(including, without limitation, reasonable legal fees and expenses) incurred by
such Indemnitee in connection with seeking to collect and collecting such
amounts) in respect of such Indemnifiable Losses or other Liability (such net
amounts are referred to herein as "Indemnity Reduction Amounts"). If any
Indemnitee receives any Indemnity Reduction
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Amounts in respect of an Indemnifiable Loss for which indemnification is
provided under this Agreement after the full amount of such Indemnifiable Loss
has been paid by an Indemnifying Party or after an Indemnifying Party has made
a partial payment of such Indemnifiable Loss and such Indemnity Reduction
Amounts exceed the remaining unpaid balance of such Indemnifiable Loss, then
the Indemnitee shall promptly remit to the Indemnifying Party an amount equal
to the excess (if any) of (A) the amount theretofore paid by the Indemnifying
Party in respect of such Indemnifiable Loss, less (B) the amount of the
indemnity payment that would have been due if such Indemnity Reduction Amounts
in respect thereof had been received before the indemnity payment was made. An
insurer or other third party who would otherwise be obligated to pay any claim
shall not be relieved of the responsibility with respect thereto or, solely by
virtue of the indemnification provisions hereof, have any subrogation rights
with respect thereto, it being expressly understood and agreed that no insurer
or any other third party shall be entitled to any benefit they would not be
entitled to receive in the absence of the indemnification provisions by virtue
of the indemnification provisions hereof.
(b) In determining the amount of any Indemnifiable Losses, such
amount shall be (i) reduced to take into account any net Tax benefit realized by
the Indemnitee arising from the incurrence or payment by the Indemnitee of such
Indemnifiable Losses and (ii) increased to take into account any net Tax cost
incurred by the Indemnitee as a result of the receipt or accrual of payments
hereunder (grossed-up for such increase), in each case determined by treating
the Indemnitee as recognizing all other items of income, gain, loss, deduction
or credit before recognizing any item arising from such Indemnifiable Losses.
Section 4.5 Procedures Relating to Indemnification.
(a) If a claim or demand is made against an Indemnitee, or an
Indemnitee shall otherwise learn of an assertion, by any Person who is not a
party to this Agreement (or an Affiliate thereof) as to which an Indemnifying
Party may be obligated to provide indemnification pursuant to this Agreement (a
"Third Party Claim"), such Indemnitee will notify the Indemnifying Party in
writing, and in reasonable detail, of the Third Party Claim reasonably promptly
(and in any event within 20 business days) after becoming aware of such Third
Party Claim; provided, however, that failure to give such notification will not
affect the indemnification provided hereunder except to the extent the
Indemnifying Party shall have been actually prejudiced as a result of such
failure (except that the Indemnifying Party will not be liable for any expenses
incurred during the period in which the Indemnitee failed to give such notice).
Thereafter, the Indemnitee will deliver to the Indemnifying Party, promptly
after the Indemnitee's receipt thereof, copies of all notices and documents
(including, without limitation, court papers) received or transmitted by the
Indemnitee relating to the Third Party Claim.
(b) If a Third Party Claim is made against an Indemnitee, the
Indemnifying Party will be entitled to participate in or to assume the defense
thereof (in either case, at the expense of the Indemnifying Party) with counsel
selected by the Indemnifying Party and reasonably satisfactory to the
Indemnitee. Should the Indemnifying Party so elect to assume the
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defense of a Third Party Claim, the Indemnifying Party will not be liable to
the Indemnitee for any legal or other expenses subsequently incurred by the
Indemnitee in connection with the defense thereof; provided that, if in the
Indemnitee's reasonable judgment a conflict of interest exists in respect of
such claim or if the Indemnifying Party shall have assumed responsibility for
such claim with any reservations or exceptions, such Indemnitee will have the
right to employ separate counsel reasonably satisfactory to the Indemnifying
Party to represent such Indemnitee and in that event the reasonable fees and
expenses of such separate counsel (but not more than one separate counsel for
all Indemnitees similarly situated) shall be paid by such Indemnifying Party.
If the Indemnifying Party assumes the defense of any Third Party Claim, the
Indemnitee will have the right to participate in the defense thereof and to
employ counsel, at its own expense, separate from the counsel employed by the
Indemnifying Party, it being understood that the Indemnifying Party will
control such defense. The Indemnifying Party will be liable for the fees and
expenses of counsel employed by the Indemnitee for any period during which the
Indemnifying Party has failed to assume the defense thereof (other than during
any period in which the Indemnitee shall have failed to give notice of the
Third Party Claim as provided above). If the Indemnifying Party assumes the
defense of any Third Party Claim, the Indemnifying Party will promptly supply
to the Indemnitee copies of all correspondence and documents relating to or in
connection with such Third Party Claim and keep the Indemnitee fully informed
of all developments relating to or in connection with such Third Party Claim
(including, without limitation, providing to the Indemnitee on request updates
and summaries as to the status thereof). If the Indemnifying Party chooses to
defend a Third Party Claim, the parties hereto will cooperate in the defense
thereof (such cooperation to be at the expense, including, without limitation,
reasonable legal fees and expenses, of the Indemnifying Party), which
cooperation shall include the retention in accordance with this Agreement and
(upon the Indemnifying Party's request) the provision to the Indemnifying Party
of records and information that are reasonably relevant to such Third Party
Claim, and making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder.
(c) No Indemnifying Party will consent to any settlement,
compromise or discharge (including the consent to entry of any judgment) of any
Third Party Claim without the Indemnitee's prior written consent (which consent
will not be unreasonably withheld); provided, that if the Indemnifying Party
assumes the defense of any Third Party Claim, the Indemnitee will agree to any
settlement, compromise or discharge of such Third Party Claim that the
Indemnifying Party may recommend and that by its terms obligates the
Indemnifying Party to pay the full amount of Indemnifiable Losses in connection
with such Third Party Claim and unconditionally and irrevocably releases the
Indemnitee completely from all Liability in connection with such Third Party
Claim; provided, however, that the Indemnitee may refuse to agree to any such
settlement, compromise or discharge (x) that provides for injunctive or other
nonmonetary relief affecting the Indemnitee or (y) that, in the reasonable
opinion of the Indemnitee, would otherwise materially adversely affect the
Indemnitee. Whether or not the Indemnifying Party shall have assumed the
defense of a Third Party Claim, the Indemnitee will not (unless required by
law) admit any liability with respect to, or settle, compromise or discharge,
such Third Party Claim without the Indemnifying Party's prior written consent
(which consent will not be unreasonably withheld).
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(d) Any claim on account of Indemnifiable Losses that does not
involve a Third Party Claim will be asserted by reasonably prompt written
notice given by the Indemnitee to the Indemnifying Party from whom such
indemnification is sought. The failure by any Indemnitee so to notify the
Indemnifying Party will not relieve the Indemnifying Party from any liability
that it may have to such Indemnitee under this Agreement, except to the extent
that the Indemnifying Party shall have been actually prejudiced by such
failure. Any notice pursuant to this Section 4.5(d) will contain a statement,
in prominent and conspicuous type, that if the Indemnifying Party does not
dispute its liability to the Indemnitee with respect to the claim made in such
notice by notice to the Indemnitee prior to the expiration of a 30-calendar-day
period following the Indemnifying Party's receipt of the second notice of such
claim, the claim shall be conclusively deemed a liability of the Indemnifying
Party. If the Indemnitee has provided the Indemnifying Party two such notices
not less than 30 days apart and the Indemnifying Party does not notify the
Indemnitee prior to the expiration of a 30-calendar-day period following its
receipt of the second such notice that the Indemnifying Party disputes its
liability to the Indemnitee under this Agreement, such claim specified by the
Indemnitee in such notice will be conclusively deemed a liability of the
Indemnifying Party under this Agreement and the Indemnifying Party will pay the
amount of such liability to the Indemnitee on demand or, in the case of any
notice in which the amount of the claim (or any portion thereof) is estimated,
on such later date when the amount of such claim (or such portion thereof)
becomes finally determined. If the Indemnifying Party has timely disputed its
liability with respect to such claim, as provided above, the Indemnifying Party
and the Indemnitee will proceed in good faith to negotiate a resolution of such
dispute and, if not resolved through negotiations by the 120th day after notice
of such claim was given to the Indemnifying Party, the Indemnifying Party and
the Indemnitee will be free to pursue such remedies as may be available to such
parties under this Agreement or under applicable law.
(e) In the event of payment in full by an Indemnifying Party to
any Indemnitee in connection with any Third Party Claim, such Indemnifying
Party will be subrogated to and shall stand in the place of such Indemnitee as
to any events or circumstances in respect of which such Indemnitee may have any
right or claim relating to such Third Party Claim against any claimant or
plaintiff asserting such Third Party Claim or against any other Person. Such
Indemnitee will cooperate with such Indemnifying Party in a reasonable manner,
and at the cost and expense of such Indemnifying Party, in prosecuting any
subrogated right or claim.
Section 4.6 Remedies Cumulative. The remedies provided in this Article
IV shall be cumulative and shall not preclude assertion by any Indemnitee of
any other rights or the seeking of any and all other remedies against any
Indemnifying Party.
Section 4.7 Survival of Indemnities. The obligations of each of Crane
and the Company under this Article IV will not terminate at any time and will
survive the sale or other transfer by any party of any assets or businesses or
the assignment by any party of any Liabilities with respect to any Indemnifiable
Losses of the other related to such assets, businesses or Liabilities.
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Section 4.8 Exclusivity of Tax Allocation Agreement. Notwithstanding
anything in this Agreement to the contrary and except as provided in the
Exchange Agreement, the Tax Allocation Agreement will be the exclusive
agreement among the parties with respect to all Tax matters, including, without
limitation, indemnification in respect of Tax matters.
ARTICLE V
ACCESS TO INFORMATION
Section 5.1 Access to Information. From and after the Time of
Distribution, Crane will, and will cause each Crane Subsidiary to, afford to
the Company and its Representatives (at the Company's expense) reasonable
access and duplicating rights during normal business hours and upon reasonable
advance notice to all Information within Crane's possession or control or in
the possession or control of a Crane Subsidiary relating to the Company, any
Company Subsidiary or the Building Products Business, insofar as such access is
reasonably required by the Company or any Company Subsidiary, subject to the
provisions below regarding Privileged Information. From and after the Time of
Distribution, the Company will, and will cause each Company Subsidiary to,
afford to Crane and its Representatives (at Crane's expense) reasonable access
and duplicating rights during normal business hours and upon reasonable advance
notice to all Information within the Company's possession or control or in the
possession or control of a Company Subsidiary relating to Crane, any Crane
Subsidiary or the businesses of the Pre-Distribution Group, insofar as such
access is reasonably required by Crane or any Crane Subsidiary, subject to the
provisions below regarding Privileged Information. Without limiting the
foregoing, Information may be requested under this Article V for audit,
accounting, claims, litigation, insurance, environmental and safety and tax
purposes, as well as for purposes of fulfilling disclosure and reporting
obligations and for performing this Agreement and the transactions contemplated
hereby.
In furtherance of the foregoing:
(a) Each party acknowledges that (i) each of Crane and the
Company (and the members of the Crane Group and the Company Group,
respectively) has or may obtain Privileged Information; (ii) there are a number
of Actions affecting one or more of the members of the Crane Group and the
Company Group; (iii) the parties may have a common legal interest in Actions,
in the Privileged Information, and in the preservation of the confidential
status of the Privileged Information, in each case relating to the business of
the Crane Group or the Company Group; and (iv) both Crane and the Company
intend that the transactions contemplated by the Transaction Agreements and any
transfer of Privileged Information in connection therewith shall not operate as
a waiver of any potentially applicable privilege.
(b) Each of Crane and the Company agrees, on behalf of itself
and each member of the Group of which it is a member, not to disclose or
otherwise waive any privilege attaching to any Privileged Information relating
to the business of the Company Group or the Crane Group, respectively, without
providing prompt written notice to and obtaining the prior written consent of
the other, which consent will not be unreasonably withheld. In the event of a
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disagreement between any member of the Crane Group and any member of the
Company Group concerning the reasonableness of withholding such consent, no
disclosure will be made prior to a final, nonappealable resolution of such
disagreement.
(c) Upon any member of the Crane Group or any member of the
Company Group receiving any subpoena or other compulsory disclosure notice from
a court, other Governmental Entity or otherwise that requests disclosure of
Privileged Information, in each case relating to the business of the Company
Group or the Crane Group, respectively, the recipient of the notice will
promptly provide to the other party (following the notice provisions set forth
herein) a copy of such notice, the intended response, and all materials or
information relating to the other Group that might be disclosed. In the event
of a disagreement as to the intended response or disclosure, unless and until
the disagreement is resolved, the parties will cooperate to assert all defenses
to disclosure claimed by either Group, at the cost and expense of the Group
claiming such defense to disclosure, and shall not disclose any disputed
documents or information until all legal defenses and claims of privilege have
been finally determined.
Section 5.2 Production of Witnesses. Subject to Section 5.1, after the
Time of Distribution, each of Crane and the Company will, and will cause each
member of the Crane Group and the Company Group, respectively, to, make
available to the other party and its Subsidiaries, upon written request and at
the cost and expense of the party so requesting, its officers, employees and
agents as witnesses to the extent that any such Person may reasonably be
required (giving consideration to business demands of such Representatives) in
connection with any Actions or other proceedings in which the requesting party
may from time to time be involved, provided that the same shall not
unreasonably interfere with the conduct of business by the Group of which the
request is made.
Section 5.3 Retention of Records. Except as otherwise required by law
or agreed to in writing, if any Information relating to the business, assets or
Liabilities of a member of a Group is retained by a member of the other Group,
each of Crane and the Company will, and will cause the members of the Group of
which it is a member to, retain for the period required by the applicable Crane
records retention policy in effect immediately prior to the Time of
Distribution all such Information in such Group's possession or under its
control. In addition, after the expiration of such required retention period,
if any member of either Group wishes to destroy or dispose of any such
Information, prior to destroying or disposing of any of such Information, (1)
Crane or the Company, on behalf of the member of its Group that is proposing to
dispose of or destroy any such Information, will provide no less than 30 days'
prior written notice to the other party, specifying in reasonable detail the
Information proposed to be destroyed or disposed of, and (2) if, prior to the
scheduled date for such destruction or disposal, the recipient of such notice
requests in writing that any of the Information proposed to be destroyed or
disposed of be delivered to such requesting party, the party whose Group is
proposing to dispose of or destroy such Information promptly will arrange for
the delivery of the requested Information to a location specified by, and at
the expense of, the requesting party.
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Section 5.4 Confidentiality. Subject to Section 5.1, which shall govern
Privileged Information, from and after the Time of Distribution, each of Crane
and the Company shall hold, and shall use reasonable efforts to cause its
Affiliates and Representatives to hold, in strict confidence all Information
concerning the other party's Group in its possession or control or furnished to
it by such other party's Group pursuant to the Transaction Agreements or the
transactions contemplated thereby and will not release or disclose such
Information to any other Person, except its Affiliates and Representatives, who
will be bound by the provisions of this Section 5.4; provided, however, that
any member of the Crane Group or the Company Group may disclose such
Information to the extent that (a) disclosure is compelled by judicial or
administrative process or, in the opinion of such Person's counsel, by other
requirements of law (in which case the party required to make such disclosure
will notify the other party as soon as practicable of such obligation or
requirement and cooperate with the other party to limit the Information
required to be disclosed and to obtain a protective order or other appropriate
remedy with respect to the Information ultimately disclosed), or (b) such
Person can show that such Information was (i) available to such Person on a
nonconfidential basis (other than from a member of the other party's Group)
prior to its disclosure by such Person, (ii) in the public domain through no
fault of such Person or (iii) lawfully acquired by such Person from another
source after the time that it was furnished to such Person by the other party's
Group, and not acquired from such source subject to any confidentiality
obligation on the part of such source known to the acquirer, or on the part of
the acquirer. Each party acknowledges that it will be liable for any breach of
this Section 5.4 by its Representatives to whom such Information is disclosed
by such party. Notwithstanding the foregoing, each of Crane and the Company
will be deemed to have satisfied its obligations under this Section 5.4 with
respect to any Information (other than Privileged Information) if it exercises
the same care with regard to such Information as it takes to preserve
confidentiality for its own similar Information.
ARTICLE VI
MISCELLANEOUS
Section 6.1 Entire Agreement; Construction. This Agreement, the
Ancillary Agreements and the Exchange Agreement, including, without limitation,
any annexes, schedules and exhibits hereto or thereto, and other agreements and
documents referred to herein and therein, will together constitute the entire
agreement between the parties with respect to the subject matter hereof and
thereof and will supersede all prior negotiations, agreements and
understandings of the parties of any nature, whether oral or written, with
respect to such subject matter. Notwithstanding any other provisions in the
Transaction Agreements to the contrary, in the event and to the extent that
there is a conflict between the provisions of this Agreement and the provisions
of the Employee Matters Agreement or the Tax Allocation Agreement, the
provisions of the Employee Matters Agreement or the Tax Allocation Agreement,
as appropriate, will control.
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Section 6.2 Survival of Agreements. Except as otherwise contemplated
by the Transaction Agreements, all covenants and agreements of the parties
contained in the Transaction Agreements will remain in full force and effect
and survive the Time of Distribution.
Section 6.3 Expenses. Except as otherwise set forth in any
Transaction Agreement and the Exchange Agreement, all costs and expenses
incurred through the Time of Distribution in connection with the Distribution,
the preparation, execution and delivery of the Transaction Agreements and the
consummation of the transactions contemplated thereby will be charged to and
paid by Crane (other than (i) the costs and expenses of the Company's credit
facilities and other financings and (ii) costs and expenses to the extent the
same relate to operations of the Building Products Business (whether the costs
and expenses described in clauses (i) or (ii) are incurred and/or paid before,
at or after the Time of Distribution), which costs and expenses described in
clauses (i) and (ii) will be charged to and paid by the Company). Except as
otherwise set forth in any Transaction Agreement or the Exchange Agreement, all
costs and expenses incurred following the Time of Distribution in connection
with implementation of the transactions contemplated by the Transaction
Agreements will be charged to and paid by the party for whose benefit the
expenses are incurred, with any expenses that cannot be allocated on such basis
to be split equally between the parties.
Section 6.4 Governing Law. This Agreement will be governed by
and construed in accordance with the internal laws of the State of Delaware
applicable to contracts made and to be performed entirely within such State,
without regard to the conflicts of law principles of such State.
Section 6.5 Notices. All notices, requests, claims, demands and other
communications required or permitted to be given hereunder will be in writing
and will be delivered by hand or telecopied or sent, postage prepaid, by
registered, certified or express mail or reputable overnight courier service
and will be deemed given when so delivered by hand or telecopied, or three
business days after being so mailed (one business day in the case of express
mail or overnight courier service). All such notices, requests, claims, demands
and other communications will be addressed as set forth below, or pursuant to
such other instructions as may be designated in writing by the party to receive
such notice:
(a) If to Crane:
Crane Co.
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: Corporate Secretary
Telecopy: (000) 000-0000
(b) If to the Company:
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Xxxxxx Xxxxxxxx Products, Inc.
00000 Xxxxx Xxxxx Xxxxx Xxxx
Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Attention: President
Telecopy: (000) 000-0000
Section 6.6 Dispute Resolution.
(a) Any disagreement, dispute or controversy after the Time of
Distribution arising out of or relating to the subject matter of this Agreement
or any Ancillary Agreement or the interpretation hereof or thereof or any
arrangements relating hereto or thereto or contemplated herein or therein or
the breach or termination hereof or thereof (each, individually, a "Dispute")
shall be resolved and settled exclusively and finally pursuant to the terms of
this Section 6.6. It is intended by the parties that any equitable relief
granted by an arbitrator shall be specifically enforced by any court of
competent jurisdiction.
(b) In the event of a Dispute between the parties, either party
(the "Claimant") may initiate the Dispute resolution procedures of this Section
by submitting to the other party (the "Respondent") a claim (a "Claim")
relating to such Dispute. To the extent practicable, any documentation relevant
to the Dispute, whether favorable or unfavorable, shall be included with said
Claim. Within thirty (30) days after receiving the Claim, Respondent shall
respond in writing by stating its position and setting forth a proposed
resolution of the Dispute. To the extent practicable, any documentation
relevant to the Respondent's response, whether favorable or unfavorable, shall
be included with such response. If the parties are not able to resolve the
Dispute within thirty (30) days after the date of receipt by the Claimant of
the Respondent's response, then the parties shall proceed in accordance with
the remainder of this Section 6.6.
(c) If the parties are unable to resolve the Dispute pursuant to
Section 6.6(b), then either party may initiate arbitration of the Dispute
pursuant to this Section 6.6(c) by notifying the other party in writing that
arbitration of the Dispute under this Section 6.6(c) is demanded (the "Demand
for Arbitration"). The parties agree to be bound by the results of the
arbitration, and judgment upon the award so rendered may be entered and
enforced in any court of competent jurisdiction. The arbitrator(s) shall have
the power and authority to render equitable relief, including the issuance of
an injunction. THE FORUM OF SUCH ARBITRATION SHALL BE NEW YORK, NEW YORK TO THE
EXCLUSION OF ALL OTHER JURISDICTIONS. THE PARTIES FURTHER AGREE AND CONSENT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK FOR THE PURPOSE OF
CONFIRMING AN AWARD AND ENTERING JUDGMENT UPON SAID AWARD, AND THE PARTIES
FURTHER WAIVE ALL OBJECTIONS TO THE JURISDICTION OF SUCH COURTS AND TO VENUE IN
ANY SUCH COURTS.
(i) If the amount in controversy is less than $250,000,
then the parties shall, within twenty (20) days after the date of the Demand
for Arbitration, select from a list of potential arbitrators provided by the
American Arbitration Association in New York, New York
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an arbitrator to hear and determine the Dispute. If the parties cannot agree
upon the selection of a single arbitrator, the parties agree that the American
Arbitration Association in New York, New York will select an independent
commercial litigation attorney with at least ten (10) years experience in
commercial litigation to serve as arbitrator. The arbitrator shall decide the
dispute or controversy in accordance with the following procedures:
(A) Within ten (10) days of the selection of the arbitrator,
each party shall submit to the arbitrator and the other party its written
position, which shall be double-spaced and shall not exceed fifteen (15) pages
(the "Initial Submission"), together with such documentary evidence as the
party deems necessary.
(B) Within ten (10) days of the delivery of the Initial
Submission, each party may submit to the arbitrator and the other party a reply
memorandum, which shall be double-spaced and shall not exceed ten (10) pages
(the "Reply Submission"), together with such documentary evidence as the party
deems necessary.
(C) Within ten (10) days of the expiration of the period
for the delivery of the Reply Submission, the arbitrator may, in the
arbitrator's sole discretion, call a hearing (a "Hearing"). The Hearing may be
conducted by conference telephone at the option of the arbitrator. At the
Hearing, the arbitrator may ask representatives and counsel for the parties
questions with respect to the issue to be decided and positions of the parties.
No party shall be entitled to conduct any discovery or to depose any person
prior to the Hearing conducted pursuant to this Section 6.6(c)(i). Unless
otherwise agreed to by the parties, the Hearing conducted pursuant to this
Section 6.6(c)(i) shall not exceed three (3) hours in duration.
(D) Within ten (10) days after the later to occur of the
Hearing, if any, and the expiration of the period for the delivery of the Reply
Submission, the arbitrator shall render a decision and/or award. The arbitrator
shall promptly notify the parties in writing of the decision and/or award. The
decision and/or award shall not contain an explanation of the decision and/or
award.
(ii) If the amount in controversy is $250,000 or more, the
parties shall, within twenty (20) days after the filing of the Demand for
Arbitration, select from a list of potential arbitrators provided by the
American Arbitration Association in New York, New York a panel of three (3)
arbitrators to hear and determine the Dispute. If the parties cannot agree upon
three (3) arbitrators, the parties agree that the American Arbitration
Association in New York, New York will select as arbitrators that number of
independent commercial litigation attorneys, each having at least ten (10)
years experience in commercial litigation, as is necessary to constitute a
panel of three (3) arbitrators after giving effect to the selection of
arbitrators agreed to by the parties. Any arbitration pursuant to this Section
6.6(c)(ii) shall be conducted in accordance with the following procedures:
(A) Within ten (10) days of the selection of the
arbitrators, each party shall submit to the arbitrators and the other party its
Initial Submission, together with such documentary evidence as the party deems
necessary.
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(B) Within ten (10) days of the delivery of the Initial
Submission, each party may submit to the arbitrator and the other party a Reply
Submission, together with such documentary evidence as the party deems
necessary.
(C) The arbitrators shall call a Hearing to be held within
sixty (60) days after the expiration of the period for the delivery of the
Reply Submission (but not earlier than forty five (45) days after the
expiration of such period unless agreed to by the parties). The Hearing may be
conducted by conference telephone at the option of the arbitrators. Prior to
the Hearing pursuant to this Section 6.6(c)(ii), the parties shall be entitled
to engage in limited discovery for the sole purpose of establishing the facts
necessary to prove the parties' claims or defenses. Specifically, each party
shall be permitted to take no more than five (5) depositions, each of which
shall last no more than eight (8) hours. The parties may also request to have
all relevant documents produced for inspection and copying. At least ten (10)
days prior to the Hearing, the parties shall exchange all documents that they
may introduce into evidence at the Hearing. The failure of a party to exchange
a particular document automatically shall preclude that party from presenting
that document into evidence. The parties further agree that each party shall
have up to a maximum of twenty (20) hours to present its claims, defenses and
rebuttal. Unless otherwise agreed by the parties, the Hearing shall not exceed
forty (40) hours in duration. The arbitrators shall render a decision and/or
award (which shall be determined by a majority vote of the arbitrators),
without explanation, within thirty (30) days after the conclusion of the
Hearing.
(d) Any fees for the arbitration and the arbitrator(s) shall be
borne equally by the parties. Each party shall pay the fees and expenses of its
counsel.
(e) If arbitration of a Dispute proceeds pursuant to Section
6.6(c), then the only issues that Claimant may raise in the arbitration
proceedings are those that were described in detail in a Claim. Failure to set
forth a claim which arises out of the claim or the facts underlying such claim
described in a Claim within the time limits described in Section 6.6(b)
constitutes a waiver of that claim and precludes the Claimant from raising such
claim in any arbitration proceeding or otherwise.
Section 6.7 Amendments. This Agreement cannot be amended, modified or
supplemented except by a written agreement executed by Crane and the Company.
Section 6.8 Assignment. Neither party to this Agreement will convey,
assign or otherwise transfer any of its rights or obligations under this
Agreement without the prior written consent of the other party in its sole and
absolute discretion, except that other than as expressly provided herein any
party may (without obtaining any consent) assign any of its rights hereunder to
a successor to all or substantially all of its business. Any such conveyance,
assignment or transfer requiring the prior written consent of another party
which is made without such consent will be void ab initio. No assignment of
this Agreement will relieve the assigning party of its obligations hereunder.
Section 6.9 Captions; Currency. The article, section and paragraph
captions herein and the table of contents hereto are for convenience of
reference only, do not
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constitute part of this Agreement and will not be deemed to limit or otherwise
affect any of the provisions hereof. Unless otherwise specified, all references
herein to numbered articles or sections are to articles and sections of this
Agreement and all references herein to annexes or schedules are to annexes and
schedules to this Agreement. Unless otherwise specified, all references
contained in this Agreement, in any annex or schedule referred to herein or in
any instrument or document delivered pursuant hereto to dollars or "$" shall
mean United States Dollars.
Section 6.10 Severability. If any provision of this Agreement or
the application thereof to any Person or circumstance is determined by a court
of competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to Persons or
circumstances other than those as to which it has been held invalid or
unenforceable, will remain in full force and effect and will in no way be
affected, impaired or invalidated thereby. If the economic or legal substance
of the transactions contemplated hereby is affected in any manner adverse to
any party as a result thereof, the parties will negotiate in good faith in an
effort to agree upon a suitable and equitable substitute provision to effect
the original intent of the parties.
Section 6.11 Parties in Interest. This Agreement is binding upon
and is for the benefit of the parties hereto and their respective successors
and permitted assigns. This Agreement is not made for the benefit of any Person
not a party hereto, and no Person other than the parties hereto or their
respective successors and permitted assigns will acquire or have any benefit,
right, remedy or claim under or by reason of this Agreement, except that the
provisions of Sections 4.2 and 4.3 hereof shall inure to the benefit of the
Persons referred to therein.
Section 6.12 Schedules. All annexes and schedules attached hereto
are hereby incorporated in and made a part of this Agreement as if set forth in
full herein. Capitalized terms used in the schedules hereto but not otherwise
defined therein will have the respective meanings assigned to such terms in
this Agreement.
Section 6.13 Termination. Subject to the provisions of the Exchange
Agreement, this Agreement may be terminated and the Distribution abandoned at
any time prior to the Time of Distribution by and in the sole discretion of the
Crane Board without the approval of the Company or of Crane's stockholders. In
the event of such termination, no party will have any liability of any kind to
any other party on account of such termination other than as provided in the
Exchange Agreement.
Section 6.14 Waivers; Remedies. The conditions to Crane's obligation to
consummate the Distribution are for the sole benefit of Crane and may be waived
in writing by Crane in whole or in part in Crane's sole discretion. No failure
or delay on the part of either Crane or the Company in exercising any right,
power or privilege hereunder will operate as a waiver thereof, nor will any
waiver on the part of either Crane or the Company of any right, power or
privilege hereunder operate as a waiver of any other right, power or privilege
hereunder, nor will any single or partial exercise of any right,
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power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, power or privilege hereunder. The rights and
remedies herein provided are cumulative and are not exclusive of any rights or
remedies which the parties may otherwise have at law or in equity.
Section 6.15 Further Assurances. From time to time after the
Distribution, as and when requested by either party hereto, the other party
shall execute and deliver, or cause to be executed and delivered, all such
documents and instruments and shall take, or cause to be taken, all such
actions as the requesting party may reasonably request to consummate the
transactions contemplated by the Transaction Agreements.
Section 6.16 Counterparts. This Agreement may be executed in
separate counterparts, each such counterpart being deemed to be an original
instrument, and all such counterparts will together constitute the same
agreement.
Section 6.17 Performance. Each party will cause to be performed
and hereby guarantees the performance of all actions, agreements and
obligations set forth herein to be performed by any Subsidiary or Affiliate of
such party.
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IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties as of the date first
above written.
CRANE CO.
By: /s/ X. X. Xxxxx
------------------------------
Name: X. X. Xxxxx
Title: Chairman and Chief Executive
Officer
HUTTIG BUILDING PRODUCTS, INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Title: President and Chief Executive
Officer
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